As I’m running through my Monday morning analysis I thought I’d share what could happen on USD/JPY this week.
The monthly time-frame is a bit of a mess, full of both bearish and bullish rejection candles as price continues to be trapped in a 500 range (109.00-114.00). Lets look at the weekly:
Since the begging of the year price has been bounded between my two monthly levels – a 500 pip range. After the latest rejection from the 114.00 level, we’ve see a swift 500 pip drop down into the lower boundaries with a fairly strong bearish engulfing candle.
Could this be enough to send us lower in the coming week?
Stepping down to the daily we can see more clearly just how important the 109.00 level has been this year – as we’ve already seen 2 major rejections and reversals from this region.
At the time of writing this, it seems as though price is once again forming a morning start formation – suggesting that we may see some upward momentum.
For me to short this pair, I’d have to see a clear daily break of 109.00 – I’d look for an entry upon a retest/retracement of the broken level (support turned resistance).
That’s it! Quick and simple! This is very quick update letting you guys know to keep an eye on this one! We’re sitting ontop of a very important level. Price will surely react regardless of direction, so be careful!
Let me know what you think – Bounce or Break?
Have a good day!